Method, computer system and computer program for determining a risk/reward model

ABSTRACT

Determining a risk/reward model for a service provided by a service provider to a serviced entity where a service provider value function for the service is dependent on at least one service provider value parameter. It further comprises provision of a serviced entity value function for the service being dependent on at least one serviced entity value parameter. It further comprises provision of weighting values for the serviced entity value function and the service provider value function. It further comprises provision of a serviced entity base case being characteristic for at least one serviced entity value parameter without provision of a service by the service provider and provision of a set of projects and their interdependencies being eligible for providing the service, each project having a given impact on a subset of one or both of the at least one serviced entity value parameter and at least one service provider value parameter. The risk/reward model is determined by way of performing a selection of the sets of projects resulting in a selection set. The selection takes into consideration the serviced entity value function, the weighting value for the serviced entity value function, the service provider value function, the weighting value for the service provider value function and the serviced entity base case. The risk/reward model provides a risk/reward line for the service to be provided relative to at least one serviced entity value parameter. The risk/reward line is characteristic for whether a reward or a penalty is accredited to the service provider depending on achieved results relative to the risk/reward line.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation of U.S. patent application Ser. No.11/589,563, filed Oct. 30, 2006, the disclosure of which is incorporatedby reference herein in its entirety.

BACKGROUND

1. Technical Field

The present invention relates to a method for determining a risk/rewardmodel for a service to be provided by a service provider to a servicedentity. It further relates to a computer program which is adapted todetermine a risk/reward model when run on a computer and to acorresponding computer system.

2. Description of Background

A transformation of a complex infrastructure, such as an informationtechnology transformation, in some organizational unit is a very complextask and involves many projects to be carried out.

It is therefore a challenge to provide a method for determining arisk/reward model for a service to be provided by a service provider toa serviced entity which enables a good success, for the service providerand for the serviced entity, of the service to be provided. It isfurther a challenge to provide a computer program product which isadapted to determine a risk/reward model when run on a computer andwhich enables a good success of the service to be provided.

SUMMARY

According to a first aspect of the invention, a method is provided fordetermining a risk/reward model for a service to be provided by aservice provider to a serviced entity. It comprises provision of aservice provider value function for the service being dependent on atleast one service provider value parameter. It further comprisesprovision of a serviced entity value function for the service beingdependent on at least one serviced entity value parameter. It furthercomprises provision of weighting values for the serviced entity valuefunction. The method further comprises provision of a serviced entitybased case being characteristic for at least one serviced entity valueparameter without provision of the service by the service provider. Itfurther comprises provision of a set of projects and theirinterdependencies being eligible for providing the service, each projecthaving a given impact on a subset of one or both of the at least oneserviced entity value parameter and at least one service provider valueparameter. It further comprises determining the risk/reward model by wayof performing a selection of the set of projects, resulting in aselection set, taking into consideration the serviced entity valuefunction, the weighting value for the serviced entity value function,the service provider value function, the weighting value for the serviceprovider value function and the serviced entity and the serviced entitybase case. The risk/reward model provides a risk/reward line for theservice to be provided relative to at least one serviced entity valueparameter. The risk/reward line is characteristic for whether a rewardor a penalty is accredited to the service provider depending on achievedresults relative to the risk/reward line. The first aspect isdistinguished by that an alignment of interests between the serviceprovider and the serviced entity may be obtained which then enables thesuccess of the service. By means of performing a

According to a preferred embodiment of the first aspect, the risk/rewardmodel also provides the selection set. In this way, the service may beprovided according to the selection set and also the selection set maybe part of a contract between the service provider and the servicedentity and ensures in that way transparency of the service to beprovided.

According to a further preferred embodiment of the first aspect, theserviced entity value parameters comprise a short-term gain andlong-term gain. In this way, objectives of the serviced entity may bemet on the time scale valued by the serviced entity.

According to a further preferred embodiment, the service provider valueparameter comprises constraints concerning business metrics. In thisway, the service provider's non-negotiable given values of businessmetrics may easily be ensured to be respected. In this respect, it isadvantageous, if the business metrics comprise one of or a combinationof a cash negative measure, return on investment, time to cash positiveor value at risk. Additionally these constraints may be relaxed byproviding appropriate value functions for their breach.

According a further preferred embodiment of the first aspect of theinvention, the determination of the risk/reward model further comprisesoptimizing the sequence of the projects, of the selection set. In thisway, an even better optimization may be obtained.

According to a further preferred embodiment of the first aspect of theinvention, the method comprises determining the risk/reward modeldependent on at least one uncertainty measure for each projectconcerning the impact of the respective project. The at least oneuncertainty measure may be, by way of example but nonetheless notlimited to, a standard deviation. In this way, the risk/reward line maybe determined more appropriately.

In this context, it is particularly advantageous if the impact of therespective product comprises a time-to-effect and/or effect magnitude.

According to a further preferred embodiment of the first aspect of theinvention, the serviced entity base case provides base case costs and/orbase case service levels and/or base case service values. In this way,an appropriate optimization may be obtained.

According to a further preferred embodiment of the first aspect of theinvention, the method comprises provision of a risk share and/or areward share between the service provider and the serviced entity anddetermining the risk/reward model dependent on the risk share and/or thereward share. In this way, a variable risk share and/or reward share maybe taken into consideration and in this way a further improvedoptimization may be accomplished.

According to a further preferred embodiment of the first aspect of theinvention, the method comprises the provision of an active service timeperiod of the service to be provided by the service provider anddetermining the risk/reward model dependent on the active service timeperiod. In this way the risk/reward model may even be more precise andthe optimization may even be further improved.

According to a further preferred embodiment of the first aspect of theinvention, the method further comprises provision of a transition timeperiod beginning right after the active service time period anddetermining the risk/reward model dependent on the transition timeperiod. The transition time period is preferably a duration aftercompletion of all the projects from the selection set or at least whenno new projects are started. By this embodiment, it may be ensured thateven close to the end of the active service time period, new projectsmay be started which have a positive impact during the transition timeduration. In this way, in particular the serviced entity's needs may bebetter met.

According to a further preferred embodiment of the first aspect of theinvention, the service concerns at least part of the serviced entity'sinformation technology environment.

According to a second aspect of the invention there is provided acomputer system comprising means for carrying out the steps of themethod or its preferred embodiments according to the first aspect of theinvention.

According to a third aspect of the invention there is provided acomputer program comprising instructions for carrying out the steps ofthe method or its preferred embodiments according to the first aspect ofthe invention when this computer program is executed on a computersystem.

The advantages of the first aspect of the invention and its preferredembodiments correspond to the advantages of the second and third aspectof the invention.

BRIEF DESCRIPTION OF THE DRAWINGS

The invention and its embodiments will be more fully appreciated byreference to the following detailed description of presently preferredbut nonetheless illustrative embodiments in accordance with the presentinvention when taken in conjunction with the accompanying drawings.

The figures are illustrating:

FIG. 1, a block diagram for determining a risk/reward model,

FIG. 2, a first total cost diagram,

FIG. 3, a second total cost diagram,

FIG. 4, a service level diagram,

FIG. 5, a service level value function diagram,

FIG. 6, a third total cost diagram,

FIG. 7, a fourth total cost diagram,

FIG. 8, a fifth total cost diagram,

FIG. 9, a sixth total cost diagram, and

FIG. 10, a computer system.

Elements of the same design or function are referred to with the samereference numerals.

DETAILED DESCRIPTION

A service provider may enter an engagement with a serviced entity toprovide a service, which may include, for example, to transform part ofthe serviced entity's information technology environment. Typically,such an engagement comprises many different projects P1-PX, which mayhave an uncertain outcome and a given uncertain impact on a subset ofone or both of an at least one serviced entity value parameter SEVP(FIG. 1) and at least one service provider value parameter SPVP, whichare both explained in more detail further below. In addition to that,the projects P1-PX typically have dependencies between each other.

Such an engagement may comprise taking over management and budgetresponsibility by the service provider. This opens the chance topositively influence and control critical success factors, such asorganizational readiness, correct skill set and sustainable orientation,in a serviced entity's information technology transformation over a timeperiod of typically between three to five years. A good relationship,mutual trust and the serviced entity's confidence in the serviceprovider's capabilities are prerequisites for such an engagement, whichmay also be referred to as a partnership. By basing this engagement on arisk/reward model, the service provider may demonstrate alignment ofinterests with the serviced entity and a commitment to sustainability.

An outcome of the risk/reward model may be used in a contract betweenthe service provider and the serviced entity for setting the frame ofthe mutual engagement. In this context, it is helpful if the outcome ofthe risk/reward model is tailored to support the serviced entity'sstrategic business objectives. Using the outcome of the risk/rewardmodel for the contract has the consequence that a portion of a riskinherent with the engagement is transferred to the service provider andon the other hand, the service provider is given the opportunity toparticipate on the client's success. In that way, incentives aregenerated and may be created in such a way that the service provider andthe client's business objectives are aligned and that the serviceprovider has a reason to transform, manage, and operate the servicedentity's tangible and intangible assets in the interest of the client.

The determination of the risk/reward model is in the following explainedby the aid of the block diagram in FIG. 1. With a block B1, a servicedentity value function SEVF is provided. The serviced entity valuefunction SEVF is dependent on at least one serviced entity valueparameter SEVP. The serviced entity value parameter SEVP may be, forexample, a short-term gain STG and a long-term gain LTG or servicedentity costs SEC, a service level SL, or a service value SV. Theserviced entity value function represents the way a change in therespective serviced entity value parameters SEVP is appreciated by theserviced entity. The serviced entity value function SEVF should beprovided from, or constructed with, the serviced entity and in that wayreflects the appreciation of changes in the serviced entity valueparameters SEVP.

An example of a respective serviced entity value function SEVFconsidering a change in the service level SL is shown in FIG. 5. Anexpected service level range SL_EXP may be agreed upon between theserviced entity and the service provider as a target to be reachedduring the provision of the service by the service provider. If then alower limit of the service level is not reached, this results in apenalty incorporated in the service level value function 9 that is partof the calculation of the actual total cost (TC in FIG. 6). If, however,the expected service level range is exceeded, then an increasing awardis incorporated in the calculation of the actual total cost (TC in FIG.6), which increases until an upper service level limit is reached. Afurther increase of the service level is no longer additionally honoredby the serviced entity. t_OSE denotes an on site end, standing for thepoint of time where the active engagement and therefore the activeservice time period AST is finished.

The short-term gain STG and the long-term gain LTG are also reflected inthe serviced entity value function SEVF and should reflect the servicedentity's objective concerning the time horizon's benefits of the serviceto be provided, which should be aimed at. An appreciation of ashort-term gain may result in a cost cutting on short notice, whereas along-term gain appreciation by the serviced entity may result in an aimat a low cost level at the end of the engagement. By defining the valuefunction, also any feasible combination between long-term gain LTG andshort-term gain STG may be represented.

A service provider value function SPVF is provided in a block B2, theservice provider value function SPVF being dependent on at least oneservice provider value parameter SPVP. The service provider valueparameter SPVP may be, for example, a cash negative measure CNM, a timeto cash positive TTCP, a time to break even TTBE, a net present valueNPV, a distribution of the net present value DNPV, a value at risk VARor service provider costs SPC. It may, for example, also comprise returnon investment. In the service provider value function SPVF one or moreof the service provider value parameters SPVP may preferably beexpressed as constraints concerning business metrics, for example, thereturn on investment must be greater than a given amount or do not gomore into the cash negative measure CNM than a further amount of money.Also, a further constraint may be comprised in the service providervalue function SPVF expressing the time to cash positive TTCP, that isthe time when the service provider starts getting money and a net flowis coming its direction, should not exceed a given time span. A furtherservice provider value parameter SPVP may be the value at risk VAR, forexample, based on the Basel I agreement. The value at risk may also belimited by way of a further constraint. These constraints may be hard orsoft. A hard constraint must be respected. A soft constraint includes a(proportional) penalty for the breach of the constraint. The serviceprovider value function SPVF represents the appreciation of the serviceprovider to changes in the service provider value parameters SPVP orexpectations to the values of the service provider value parametersSPVP.

A service provider weighting value W_SPVF and, respectively, a servicedentity weighting value is provided in blocks B3 and, respectively, B4.The service provider and serviced entity weighting values W_SPVF, W_SEVFhave an influence on how the serviced entity value function SEVF and theservice provider value function SPVF are weighted when determining therisk/reward model's output. The service provider weighting value W_SPVFand the serviced entity weighting value W_SEVF are used by the serviceprovider to obtain a range of optimal solution about which to negotiatewith the serviced entity.

In a block B5, a serviced entity base case SEBC is provided, which ischaracteristic for at least one serviced entity value parameter SEVPwithout provision of the service by the service provider. The servicedentity base case SEBC should represent the present and projected courseof the at least one serviced entity value parameter SEVP without theprovision of the service by the service provider. By the serviced entitybase case SEBC, for example, one or more of the following may beprovided: serviced entity base case costs SEBCC, base case service levelSLBC, base case service value SVBC. The serviced entity base case SEBCis provided by the serviced entity. Usually this will be at least onecost and at least one service level.

The service level SL may by way of example be in the case of a searchmachine on the Internet an expected time for obtaining results.

With a block B6, a risk share RIS, reward share RES, an active servicetime period AST and possibly a transition time period TT are provided.In the course of determining the risk/reward model, a risk/reward lineRI/RE_L is provided by the model relative to at least one servicedentity value parameter SEVP. If the actual course of the respectiveserviced entity value parameter during the active service time periodAST and/or the transition time period TT differs from the risk/rewardline RI/RE_L, the risk is taken over by the service provider accordingto the risk share RIS, whereas if things go better, then given by therisk/reward line RI/RE_L, the service provider receives the given rewardshare RES. The risk share RIS and the reward share RES may be subject tonegotiations prior to the engagement between the serviced entity and theservice provider.

Also, the active service time period AST and, optionally, the transitiontime period TT are subject to negotiations. Provision of the transitionperiod TT may ensure sustainability effects of the service to beprovided. The transition time period TT is a duration of time aftercompletion of all projects P1-PX or when no new projects P1-PX arestarted. The transition time duration TT starts directly after theactive service time period AST has finished. The risk/reward lineRI/RE_L determined by the risk/reward model extends over the transitiontime period TT and therefore risk and reward sharing is also possibleduring the transition time period TT, which establishes sustainabilityof effects of the service to be provided by the service provider.

Examples of risk/reward lines RI/RE_L are shown by way of example in theFIGS. 2 and 3. TC denotes total cost, that is the serviced entity costsSEC and the service provider costs SPC. 5 denotes service providerinvestments.

With the block B7, a set PS of projects P1-PX is provided, beingeligible for providing the service or transition service. Each projectP1-PX has a given impact IMP on a subset of one or both of the at leastone serviced entity value parameter SEVP and at least one serviceprovider value parameter SPVP. With the set of projects PS, also overallconstraints OC and dependencies DEP are provided with block B7. Theoverall constraints and/or the dependencies may reflect an availabilityor disposal of manpower or in particular the availability of experts orcertain limitations on when new projects may not be started, forexample, close to quarter closings or product launches. The set PS ofproject P1-PX comprises various projects P1-PX, each having a given butfrom project P1-PX to project P1-PX possibly different impact IMP.Typical projects include server consolidation, consolidation of SAPinstances, redesign of web functionality, and selective sourcing ofsupport functions (e.g. call center for Windows support to EasternEurope or India).

Each project P1-PX has uncertainties. Some projects may be more riskythan others and their duration may be uncertain, also the cost theyinvolve or the effect on the respective subset of one or both the atleast one serviced entity value parameter SEVP and the at least oneservice provider value parameter SPVP may be uncertain. For thatreasons, in block B7 at least one given uncertainty measure may beprovided in connection to each project P1-PX, being for example astandard deviation concerning the impact IMP on the subset of one orboth of the at least one serviced entity value parameter SEVP and atleast one service provider value parameter SPVP. The impact may alsocomprise time-to-effect and/or effect magnitude.

A block B9 is designed to accomplish the determination of therisk/reward model and to output the risk/reward line RI/RE_L andreceives its inputs from all the blocks B1-B7 which output the servicedentity value function, the service provider value function, the serviceprovider weights W_SPVF, the serviced entity weights W_SEVF, theserviced entity base case SEBC, the risk share RIS, the reward shareRES, the active service time period AST, the transition time period TT,the project set PS including the overall constraints OC and dependenciesDEP and the projects P1-PX including the respective impact IMP, andother parameters discussed above.

Block B9 comprises an optimizer, preferably a so-called globaloptimizer, which preferably automatically takes into consideration allthe inputs to block B9 and improves or optimizes the risk/reward linefor the service to be provided relative to at least one serviced entityvalue parameter SEVP.

During the optimization process in a step S2, various differentrisk/reward lines are specified automatically. In a step S4, projectsP1-PX from the set PS of projects P1-PX are selected, forming aselection set SSP. Every time step S4 is executed, preferably adifferent project P1-PX is selected for forming the selection set SSP.Then in a step S6, the projects from the selection set SSP are eachscheduled, that is respective starting points for the respectiveprojects P1-PX are specified automatically using the global optimizer,e.g. Tabu Search. Then in a step S8, it is evaluated whetheroptimization criteria OPT are satisfied. The optimization criteria arederived from the serviced entity value function SEVF and its associatedserviced entity weighting value W_SEVF, the service provider valuefunction SPVF and its associated service provider weighting valueW_SPVF, the serviced entity base case SEBC, the risk share RIS, thereward share RES, the active service time period AST, the transitiontime period TT, the overall constraints OC concerning the projects andtheir dependencies DEP and the impact IMP of the projects P1-PX of theselection set SSP.

If in step S8 it is determined that the optimization criteria OPT arenot met, then it is proceeded to one of the steps S2, S4 or S6. Forexample, various permutations of the scheduling of the selection set SSPconcerning the scheduling of the respective projects P1-PX may takeplace prior to again changing the selection of projects P1-PX in theselection set SSP. In the same way, then as an outer loop, the selectionset may be varied by running step S4 consecutively before therisk/reward line RI/RE_L is changed in a further outer loop in step S2.However, the order of the steps S2-S6 may also be different, especiallytheir consecutive run may be varied in a different way. Preferably, therisk/reward line RI/RE_L is determined by respective use of a suitedoptimization tool such as tabu search

If it is determined in step S8 that the optimization criteria OPT aremet, then the optimization is finished and the last specifiedrisk/reward line RI/RE_L is provided as an output in a block B11. Therisk/reward line may, for example, be related to the serviced entitycosts SEC. The risk/reward line may, however, also be related to theservice level SL or the service value SV and it is also feasible thatvarious risk/reward lines RI/RE_L are determined in block B9 and thenoutputted in block B11. It should be noted that the determination of theoptimization criteria in step S8 may also only take into considerationan arbitrary sub-set of the above-mentioned terms or sizes.

A further output of block B9, if the optimization criteria OPT are metin step S8, is a selection set SSP, provided in a block B13 anddetermined when running step S6 the last time before the optimizationcriteria OPT were satisfied in step S8. In addition to that, therisk/reward model may be designed such that it also improves oroptimizes the risk share RIS and/or the reward share RES. In this case,a respective step for automatically specifying various values for therisk share RIS and/or the reward share RES are provided in block B9. Inthis case, it is not necessary to input the risk share RIS or,respectively, the reward RES share from block B6. However, the riskshare RIS and the reward share RES are often negotiated outside theautomatic process of the optimization in block B9 and are thereforegiven. For example, the reward share may be 50%, whereas the risk sharemay be 100% with the service provider. Further outputs of block B9 maybe provided in a block B15.

The risk/reward model may also be applied to a different service to beprovided by the service provider, such as by way of example therestoration of a house or, for example, the development of a new leisurecomplex or also other services.

FIG. 6 shows different risk/reward lines RI/RE_L which are outputs fromblock B9 depending on whether the serviced entity has a high preferencefor a short-term gain STG or rather a high preference for a long-termgain LTG.

In the course of checking the optimization criteria OPT in Block B9,also the transition time period TT and the active service time periodAST may be taken into consideration. FIG. 7 shows an exemplaryrisk/reward line RI/RE_L being output in block B11 and further exemplaryeffective costs EC during the provision of the services by the serviceprovider. In this case, the reward share RES is assumed to be 50%. In aperiod of time between points of time t0 and t1, the commitments set bythe risk/reward line RI/RE_L are not met, which results in a −40 value.Then, in the further time period between points of time t1 and t2, theeffective costs are below the risk/reward line RI/RE_L resulting in areward value of 20. In a further time period between the points of timet2 and t3, the effective costs also lie under the risk/reward lineRI/RE_L which results in a reward value of 30. The overall reward thenresults in reward of five taking into consideration the reward sharingratio.

FIG. 8 shows a further development of the total cost TC over time. As anexample, projects P1, P3, P2 and P4 are shown. It is also indicated therespective phases of the respective projects P1 to P4 involving costsand, respectively, benefits. Due to the provision of the transition timeperiod TT, the project P2 is started even though its benefit phase ispartly after the active service time period AST. In this way, theserviced entity profits from the benefits from the project P2 and theservice provider has an incentive to start project P2 as the serviceprovider also benefits from the benefits provided by the project P2during the transition time period TT. Project P4 would be determined tonot be started as its benefit phase would protrude too long into thetransition time period and taking into consideration given uncertaintiesrelated to the project P4, the incentive for the service provider wouldnot be enough to start P4.

FIG. 9 shows a further example of effective costs versus the risk/rewardline RI/RE_L over time. In this case, a PTI checkpoint is given, whichrefers to a pretax income checkpoint.

The whole process for determining the risk/reward model for the serviceto be provided including then actually providing the service may be asfollows. A common understanding of the serviced entity base case SEBC isestablished. Potential projects are identified, for example, resultingin the set of project PS. The serviced entity's contract requirementsand preferences are identified. Then, the block diagram's actions andsteps are performed according to the block diagram in FIG. 1. Afterthat, a project solution definition may take place i.e. detailedimplementation planning. A delivery sign-off, a quality assurancesign-off and a finance sign-off may take place. Then, negotiations takeplace, resulting in the signing of a contract regulating the termsincluding the risk/reward line RI/RE_L. During the active service timeperiod AST, ongoing change requests and adaptations may be necessary,possibly resulting in a new determination of the risk/reward model.

Concerning the serviced entity base case costs SEBCC, the aspects theservice provider is responsible for and on the other hand those aspectsthe service provider is not responsible for should be specified.Examples for the aspects the service provider may not be responsiblefor, may be, for example, software license costs from third parties.

The projects P1-PX may be, for example, cost-cutting projects, qualityimprovements projects such as service level improvement ortransformation projects. Cost-cutting and quality improvement projectsshould be assessed in a uniform framework. They might have significantimplications for the serviced entity. The two types of projects competewith each other for inclusion in the selection set SSP. If there arevery good cost-cutting possibilities, then one will not do many qualityimprovement projects. Thus, one will require exceptional rewards toinclude quality improvement projects when there are good costcuttingprojects available. The serviced entity's requirements for minimalquality improvement may also be handled outside of the risk/rewardmodel.

Preferably, the 80:20 rule is applied for the value functions and thequality optimization projects, i.e. it is focused on the most importantaspects to the serviced entity and to the service provider.

FIG. 10 shows a computer system with a first unit 20 which serves as aninput unit for inputting the data provided to block B9 in FIG. 1. Itfurther comprises a second unit 30 for running a computer program fordoing the optimization that is described in the context of block B9. Forthat purpose a respective memory and a processor may be provided. Athird unit is an output unit for outputting the results from block B9such as the risk/reward line RI/RE_L or the selection set SSP.

1. A method for determining a risk/reward model for a service to beprovided by a service provider to a serviced entity, the methodcomprising: provision of a service provider value function for theservice being dependent on at least one service provider valueparameter; provision of a serviced entity value function for the servicebeing dependent on at least one serviced entity value parameter;provision of weighting values for both the serviced entity valuefunction and the service provider value function; provision of aserviced entity base case being characteristic for at least one servicedentity value parameter without provision of the service by the serviceprovider; provision of a set of projects and their interdependenciesbeing eligible for providing the service, each project having a givenimpact on a subset of one or both of the at least one serviced entityvalue parameter and at least one service provider value parameter;determining the risk/reward model by way of performing a selection ofthe set of projects, resulting in a selection set, taking intoconsideration the serviced entity value function, the weighting valuefor the serviced entity value function, the service provider valuefunction, the weighting value for the service provider value functionand the serviced entity base case and the risk/reward model providing arisk/reward line for the service to be provided relative to at least oneserviced entity value parameter; and the risk/reward line beingcharacteristic for whether a reward or a penalty is accredited to theservice provider depending on achieved results relative to therisk/reward line.
 2. The method according to claim 1, with therisk/reward model providing the selection set.
 3. The method accordingto claim 1, with the serviced entity value parameters comprising shortterm gain and long term gain.
 4. The method according to claim 1, withthe service provider value parameter comprising constraints concerningbusiness metrics.
 5. The method according to claim 4, with the businessmetrics comprising cash negative measure, return on investment, time tocash positive, time to break even, net present value, distribution ofnet present value, or value at risk.
 6. The method according to claim 1,with the determination of the risk/reward model further comprisingoptimizing the sequence of the projects of the selection set.
 7. Themethod according to claim 1, further comprising determining therisk/reward model dependent on at least one uncertainty measure for eachproject concerning impact of the respective project.
 8. The methodaccording to claim 7, wherein the impact comprises time-to-effect and/oreffect magnitude.
 9. The method according to claim 1, with the servicedentity base case providing serviced entity base case costs and/or basecase service levels and/or base case service values.
 10. The methodaccording to claim 1, comprising provision of a risk share and/or areward share between the service provider and the serviced entity anddetermining the risk/reward model dependent on the risk share and/or thereward share.
 11. The method according to claim 1, comprising provisionof an active service time period of the service to be provided by theservice provider and determining the risk/reward model dependent on theactive service time period.
 12. The method according to claim 1,comprising provision of a transition time period beginning right afterthe active service time period and determining the risk/reward modeldependent on the transition time period.
 13. The method according toclaim 1, with the service concerning at least part of the servicedentity's information technology environment.
 14. The method according toclaim 1, wherein the risk/reward model is determined by way ofoptimizing the selection of the set of projects, resulting in theselection set, taking into consideration the serviced entity valuefunction, the weighting value for the serviced entity value function,the service provider value function, the weighting value for the serviceprovider value function and the serviced entity base case.
 15. Acomputer program product comprising a computer readable media havingcomputer code thereon for determining a risk/reward model for a serviceto be provided by a service provider to a serviced entity by a methodof: provision of a service provider value function for the service beingdependent on at least one service provider value parameter; provision ofa serviced entity value function for the service being dependent on atleast one serviced entity value parameter; provision of weighting valuesfor both the serviced entity value function and the service providervalue function; provision of a serviced entity base case beingcharacteristic for at least one serviced entity value parameter withoutprovision of the service by the service provider; provision of a set ofprojects and their interdependencies being eligible for providing theservice, each project having a given impact on a subset of one or bothof the at least one serviced entity value parameter and at least oneservice provider value parameter; determining the risk/reward model byway of performing a selection of the set of projects, resulting in aselection set, taking into consideration the serviced entity valuefunction, the weighting value for the serviced entity value function,the service provider value function, the weighting value for the serviceprovider value function and the serviced entity base case; and therisk/reward model providing a risk/reward line for the service to beprovided relative to at least one serviced entity value parameter, therisk/reward line being characteristic for whether a reward or a penaltyis accredited to the service provider depending on achieved resultsrelative to the risk/reward line.
 16. A computer system having a centralprocessor unit, memory, and input/output, said memory having computercode thereon for configuring and controlling the computer system fordetermining a risk/reward model for a service to be provided by aservice provider to a serviced entity by a method of: provision of aservice provider value function for the service being dependent on atleast one service provider value parameter; provision of a servicedentity value function for the service being dependent on at least oneserviced entity value parameter; provision of weighting values for boththe serviced entity value function and the service provider valuefunction; provision of a serviced entity base case being characteristicfor at least one serviced entity value parameter without provision ofthe service by the service provider; provision of a set of projects andtheir interdependencies being eligible for providing the service, eachproject having a given impact on a subset of one or both of the at leastone serviced entity value parameter and at least one service providervalue parameter; determining the risk/reward model by way of performinga selection of the set of projects, resulting in a selection set, takinginto consideration the serviced entity value function, the weightingvalue for the serviced entity value function, the service provider valuefunction, the weighting value for the service provider value functionand the serviced entity base case; and the risk/reward model providing arisk/reward line for the service to be provided relative to at least oneserviced entity value parameter, the risk/reward line beingcharacteristic for whether a reward or a penalty is accredited to theservice provider depending on achieved results relative to therisk/reward line.